Mrwhy Do Sales Of Bottled Water Grow Every Year Despite Of The Well-Known Fact That It Is Produced From The Same Tap Water?Essay Preview: Mrwhy Do Sales Of Bottled Water Grow Every Year Despite Of The Well-Known Fact That It Is Produced From The Same Tap Water?Report this essayWhy do sales of bottled water grow every year despite of the well-known fact that it is produced from the same tap water?Bottled water industry did not exist 30 years ago and it was only in the 70’s that French companies Perrier and Evian started offering bottled water for sale. Today, every beverage company sells its version of bottled water for prices that range from 50 cents to 5 dollars per gallon. Since 70’s the sales bottled water have grown to a $16 billion per year (2007 estimate). So, what drives people to buy a product that is readily available in every home in the United States?
[1]According to the Bureau of Consumer Protection (COPP) in their 2010 “Costs of Drinking Water,” Americans spend roughly $3 billion per year each year drinking “1 liter of water, approximately four percent of all water consumption”. It is estimated that only 2% of the American body of water contains a usable amount of drinking water. The problem is that most of our drinking water supply is generated locally, thus increasing the need for water meters and the use of aquifers. In our modern homes, a home uses water that comes from our main source to produce our drinks: drinking water. However, our public water systems, such as the tap and the distribution system, does not provide enough water. As an example, back in 2009, the Department of Energy (DOE) released a study that found that “a major factor for the reduction in the demand for drinking water is the decline in the amount of water available to households, which is due to a lack of access to clean, source water where there is a shortage of clean, well-drained water. As a result of these and other factors, demand for drinking water has decreased due to a combination of water scarcity, poor demand and a lack of access to sufficient sources of clean, well-produced, and well-fed drinking water.” This finding was announced as part of the 2010 report from the Consumer Product Safety Commission.However, according to the Center for American Progress (CAP) on Environment and Technology (CASE), a nonprofit group that examines the industry’s relationship with natural ecosystems, only 3% of water supply comes from fresh groundwater: “No wells are drilled, and water used in aquifers is used on the way to and from the source. It is important to remember that water is water, but the quality of the water that it flows is only 1% of what your family needs, and this is even greater when you have a well that pumps more water. That is a question that has been asked by politicians, legislators, and federal agencies on land use, water quality and public health issues. The recent news reports on the ongoing debate about whether to increase water use in places like Michigan, Texas, Georgia, and Ohio mean that the United States is in for trouble with this issue because of the way that the drinking water industry has operated since the 1970s with impunity.”If the United States was to meet our increasing water needs, it would require major changes in how our water is used and treated. The US Department of Agriculture is currently undertaking an effort to improve the handling capabilities of water systems by adding filtering systems. According to the US Department of Agriculture, in 2012, the Bureau of Pesticide and Hazardous Substance Administration (BPA) will spend over $40.1 million to upgrade the quality management system used by the US Department of Agriculture and the US Environmental Protection Agency (EPA). The system uses new, specially-designed filtration filters to prevent harmful contaminants from entering the environment that are not present in the environment that it was supposed to be conducting before it was invented. The program will improve the quality of water throughout the US.According to the US EPA, “the BPA is intended to be easy to regulate. It does not affect any existing or future plants or organisms – it is intended to serve the needs of the American public, and that includes
[1]According to the Bureau of Consumer Protection (COPP) in their 2010 “Costs of Drinking Water,” Americans spend roughly $3 billion per year each year drinking “1 liter of water, approximately four percent of all water consumption”. It is estimated that only 2% of the American body of water contains a usable amount of drinking water. The problem is that most of our drinking water supply is generated locally, thus increasing the need for water meters and the use of aquifers. In our modern homes, a home uses water that comes from our main source to produce our drinks: drinking water. However, our public water systems, such as the tap and the distribution system, does not provide enough water. As an example, back in 2009, the Department of Energy (DOE) released a study that found that “a major factor for the reduction in the demand for drinking water is the decline in the amount of water available to households, which is due to a lack of access to clean, source water where there is a shortage of clean, well-drained water. As a result of these and other factors, demand for drinking water has decreased due to a combination of water scarcity, poor demand and a lack of access to sufficient sources of clean, well-produced, and well-fed drinking water.” This finding was announced as part of the 2010 report from the Consumer Product Safety Commission.However, according to the Center for American Progress (CAP) on Environment and Technology (CASE), a nonprofit group that examines the industry’s relationship with natural ecosystems, only 3% of water supply comes from fresh groundwater: “No wells are drilled, and water used in aquifers is used on the way to and from the source. It is important to remember that water is water, but the quality of the water that it flows is only 1% of what your family needs, and this is even greater when you have a well that pumps more water. That is a question that has been asked by politicians, legislators, and federal agencies on land use, water quality and public health issues. The recent news reports on the ongoing debate about whether to increase water use in places like Michigan, Texas, Georgia, and Ohio mean that the United States is in for trouble with this issue because of the way that the drinking water industry has operated since the 1970s with impunity.”If the United States was to meet our increasing water needs, it would require major changes in how our water is used and treated. The US Department of Agriculture is currently undertaking an effort to improve the handling capabilities of water systems by adding filtering systems. According to the US Department of Agriculture, in 2012, the Bureau of Pesticide and Hazardous Substance Administration (BPA) will spend over $40.1 million to upgrade the quality management system used by the US Department of Agriculture and the US Environmental Protection Agency (EPA). The system uses new, specially-designed filtration filters to prevent harmful contaminants from entering the environment that are not present in the environment that it was supposed to be conducting before it was invented. The program will improve the quality of water throughout the US.According to the US EPA, “the BPA is intended to be easy to regulate. It does not affect any existing or future plants or organisms – it is intended to serve the needs of the American public, and that includes
There have been a number of research studies on the issue and the data is readily available. In fact, ABC’s 20/20 investigated this issue and aired an episode on it in May 2005. ABC performed a number of chemical tests and concluded that there was no difference between the chemical compositions of tap water and bottled water. Moreover, most people failed to identify tap water on a blind test. Companies like Coca-Cola and Pepsi confirmed on a numerous occasions that their product is just a packaged and filtered tap water taken from sources around the country.
Let us first look at the market of bottled water at its conception 30 years ago. First entrants to market were positioning bottled water as an upscale product and were packaging it in fancy glass bottles and selling it through upscale restaurants and grocery chains. At that time, bottle water was considered a luxury good and people who purchased bottled water basis were mostly buying status and feeling of belonging to a higher society. That allowed companies to charge high prices for it. The demand and supply curves are shown in the figure below as S1 and D1.
During 1970s and 1980s high profit margins attracted more players into the market and the product gradually started to commoditize. Companies started to experience economies of scale and greater efficiencies. This ultimately shifted the supply curve far to the right (S1 to S2 on the figure below). During the same period of time the status of a luxury product was stripped away from the bottled water and products such faucet filters, refrigerators with drinking water and office water coolers were introduced. All these products were designed to produce a direct substitute for the bottled water — filtered tap water. After an initial investment into one of the filters, consumers could get access to unlimited supply of free filtered water. Therefore, the plain logic would suggest that the effect of cheap substitutes would result in the dramatic decrease of the demand for the bottled water and shift of the demand curve to the right. The “would-be” demand line is shown as D? in the figure below:
If the demand for the bottled water really changed this way, we would have seen a sharp decline